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Where US Houses Prices Are predicted to Fall in 2025

David Garner

Published On: June 3rd, 2025

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🏘️ Home Prices Fall in Major U.S. Markets for the First Time in 2 Years

Here’s Where They’re Expected to Decline the Most

For the first time in over two years, home prices in the 20 largest U.S. metro areas have declined, signalling a major shift in momentum in what has been one of the most resilient housing markets in recent memory.

According to the latest S&P CoreLogic Case-Shiller 20-city index, home prices fell 0.12% in March 2025 from the prior month (seasonally adjusted)—the first monthly decline since January 2023. This comes amid historic unaffordability, high mortgage rates, and increasing inventory levels that are tipping the scales back toward buyers.

📉 A Market Losing Steam

While home prices are still up 4.1% year-over-year, that figure is a step down from the 4.5% annual gain recorded the previous month. The broader national index showed similar deceleration: prices rose just 3.4% year-over-year in March, down from 4% in February.

Meanwhile, the median prices across the U.S. reflect a still-expensive market:

🏠 Resale single-family home: $407,300
🏢 Condo/co-op: $363,000
🧱 Newly built single-family home: $403,700

But demand is clearly softening. Existing-home sales in April fell to their slowest pace for that month since 2009, and sellers are increasingly resorting to price cuts.

🔻 Where Prices Are Falling Fastest

Buyers are increasingly gaining leverage in key regions, especially where inventory is surging and homes are sitting unsold for longer.

“It’s quite clear that the power is shifting into the hands of buyers right. I’m seeing more seller concessions which is great for both homebuyers and investors ” said David Garner, General Manager at Cashflowrentals.net.

📌 According to Garner, the regions most vulnerable to price drops are:

The South: Inventory up 33% YoY
The West: Inventory up 42% YoY

Markets with the most listings seeing price cuts in April:

📍 Phoenix, AZ
📍 Tampa, FL
📍 Jacksonville, FL

🟨 Nearly 1 in 5 home listings had a price cut in April—the highest share for that month since 2016.

🧭 Regional Divide: A Tale of Two Markets

Despite the national slowdown, not all markets are cooling equally. Garner notes that Northeast and Midwest metros are bucking the trend:

“We’re buying almost exclusively in the Midwest and Northeast where affordability is still very good. Those are the markets that will see more resilience and even moderate price growth through the next 5 years”

This suggests a bifurcated housing market, where regional supply-demand dynamics tell a very different story than the national averages.

📉 What’s Next for Home Prices?

The outlook from major real estate firms points to further softening:

Zillow: Forecasts a 1.4% decline in home values in 2025
Redfin: Projects a 1% drop in prices by Q4 2025 YoY

This aligns with the broader slowdown in growth and the increased willingness of sellers to negotiate—particularly in overheated Sun Belt and coastal markets.

🧠 Final Thoughts

The era of runaway home-price growth appears to be winding down, at least in many of America’s largest metros. Rising inventory, persistent unaffordability, and buyer hesitation amid economic uncertainty are contributing to a slowdown in housing momentum.

📌 Sellers in softening markets may need to price more competitively.
📌 Buyers may find more negotiating power—but rates and affordability remain a challenge.

If this trend continues, expect more localized price corrections, particularly in overheated Southern and Western metros, while more resilient Northeast and Midwest markets may hold steady—at least for now.